As net zero targets, indoor air quality, and carbon footprint reductions continue to be important to building owners—and as 70 percent of international companies are increasing their sustainability spending, according to Future Research and Honeywell International—there’s a growing opportunity for professional contractors to help clients meet their environmental and social goals through HVAC systems upgrades.

By partnering with a local utility provider like National Grid that has a team of experts who help their customers assess building energy performance and then provide technical assistance and strategies to make their systems and processes more efficient, the building professionals can effectively lower their client’s overall energy use. The programs and financial incentives offered from providers like National Grid make it even easier for trade professionals to sell their customers on making the switch to energy efficient heating and cooling solutions.

The Growing Demand for Energy-Efficient Heat Pumps

From large commercial building owners to single-family homeowners, many have felt the pressure to switch to more energy efficient HVAC solutions. Whether the motivation is a result from the financial pinch of growing heating fuel costs during the past few years or the rising tide of sustainability pressure, there’s been a noticeable increase in the number of energy efficient HVAC systems, like heat pumps, smart thermostats, and Energy Star-rated models.

The smart thermostat market is projected to continue to grow from $1.2 billion in 2022 to $3.8 billion by 2029. Plus, the U.S. witnessed a 15 percent increase in heat pump installations during 2021. Globally, there are about 190 million heat pumps operating, and the International Energy Agency is pointing to cooling demands, climate objectives, and energy security as key drivers for the rise in energy efficient HVAC solutions.

There are also financial incentives, rebates, and tax credits available for energy efficient upgrades from the government and utilities like National Grid. Beyond financial incentives, four out of five homeowners who have switched to heat pumps report being satisfied with their choice, according to a survey of 2,500 owners in 2022 by Nesta. Plus, with the U.S. EPA’s set of guiding principles and best practices to improve indoor air quality (IAQ) and ventilation under the Clean Air in Buildings Challenge, Johnson Controls predicts that nearly a third of commercial businesses will increase their investments in smart building technology and energy efficient systems.

“To me, heat pumps are a better solution that’s more efficient, more attractive and will give us the results we want,” says Joe Lischinsky, owner of Safe Harbor Martial Arts and More in Beverly, Massachusetts. Through the installation of a heat pump and weatherization upgrades, his martial arts center received incentives for a portion of the projected installation costs and reduced greenhouse gas emissions by 1.72 metric tons.

Decreasing Demand for Fossil-fuel appliances

Electricity, natural gas, fuel oil, and propane are the main ways Americans heat and cool buildings, and 9 out of 10 use either electricity or natural gas. Following a 2022 study that revealed U.S. gas stoves release 2.6 million tons of methane annually when they aren’t running, and 6.8 million tons of carbon dioxide when in use, there is growing debate about limiting the use and installation of gas appliances.

Despite the federal government’s recent efforts to block the Consumer Product Safety Commission from banning gas stoves, there has been a growing list of natural gas limitations and bans being discussed in cities and municipalities because of the impact of natural gas on the environment, sustainable renewable electricity is increasingly becoming a more attractive solution.

Even without bans or incentives, there is rising demand from net zero experts for natural gas alternatives. Researchers from Princeton University say that most of the non-electricity-based HVAC systems will need to be replaced with electric in order to reach the country’s net-zero goals by 2050.

Why choose an energy efficient HVAC system?

Choosing HVAC that has an Energy Star label and attaining Energy Star certification translates to an average of 35 percent less energy used than for a typical building, and it’s 6 percent more efficient than standard equipment. Those certified buildings also deliver about 16 percent more in rent and sales prices. According to Energy Star, more than 125 billion pounds of greenhouse gas emissions would be prevented and more than $3 billion would be saved if all light commercial buildings had Energy Star-certified equipment.

When comparing the types of energy efficient HVAC options, an energy efficient heat pump costs about $2,000 to $5,000 less than other types of HVAC systems at a national average of about $17,747 with a ROI of 103.5 percent, and annual costs are less than most other types of heating systems. A high-efficiency heat pump can harness ambient heat from the ground (geothermal), air, or water while using about 1/3 to 1/5 of the electricity needed from a conventional system.

Geothermal heat pumps are about three times more efficient than oil heating and air-source heat pumps are about 50 percent more efficient than oil heating. In addition, they reduce greenhouse gas emissions by about 20 percent when compared to a gas boiler.

Air-source heat pumps account for about 60 percent of units sold in 2021, and they can be installed with or without ducts. Heat pumps use less energy, take up a smaller footprint, and can reduce annual utility bills by $100 to $1,300, according to the National Renewable Energy Laboratory. They can also incorporate HEPA filtration and do not require fuel storage.

What’s the bottom line?

With the recent hyper-focus on net zero and indoor air quality, contractors who are prepared to guide clients toward more sustainable strategies—that don’t contribute known toxins into the indoor environment like heat pumps—not only help clients reach their carbon emission, IAQ, and ESG goals, they are also carving out a competitive advantage among their peers.

For more information about upgrading energy performance or helping clients reach their sustainability goals, visit National Grid.